Capital Markets | CFC Finance Option

What It Is:

This solution offers your business short-term funding against unconverted CFC FCY Balances at a point in time when FX volatility and conversion doesn’t merit the conversion, albeit that local creditors need to be settled. CFC Balances can further be value enhanced by way of hedging wrapper with the CFC Finance Option liquidity provider.

Risks Attached:

  • Converting FCY Balances at unprofitable FX rates yields increased costs and lower GP Margins.
  • Not settling local creditors due to the inability to convert FCY Balances given loss results in both reputation and credit standing deterioration.
  • Realised FX losses combined with loss of supplier discounts due to late settlement results in lower margins and negative cashflows.

Business Value Add

  • Enhanced cash flow management and liquidity.
  • Allows to settle local ZAR suppliers whilst managing and enhancing FX profits on CFC Balances.
  • Enhance tools to manage FX Risk at a fraction of the real FX Loss costs.